Pregnancies complicated by asthma are associated with an increased risk of low birth weight. Currently, the mechanisms causing this outcome are unknown. To investigate whether impaired placental function may be a determinant, we measured placental 11β-hydroxysteroid dehydrogenase type 2 (11β-HSD2) activity, protein and mRNA, placental CRH mRNA, fetal cortisol, and fetal estriol concentrations at delivery. Asthmatic subjects were classified according to inhaled glucocorticoid intake during pregnancy and compared with a control nonasthmatic group. There was a 25% reduction in neonatal birth weight centile in asthmatic women who did not use inhaled glucocorticoid treatment. This was accompanied by significantly reduced placental 11β-HSD2 activity, significantly increased fetal cortisol, and a trend toward increased placental CRH mRNA and reduced fetal estriol concentrations. The use of inhaled glucocorticoids for treatment was associated with birth weight centile, 11β-HSD2 activity, CRH mRNA, fetal cortisol, and estriol concentrations similar to control levels. There was a significant inverse correlation between fetal cortisol and fetal estriol concentrations across all groups. These studies demonstrate that inhaled glucocorticoid intake for the treatment of asthma is associated with improved placental function and fetal outcome, suggesting that inflammatory factors associated with asthma may be detrimental to fetal growth and development in these pregnancies.